Vestas left behind as rivals bag offshore turbine deals

WORLDWIDE: A 1.8GW deal secured in July by Siemens for its 6MW offshore turbine has underlined The German firm's pre-eminence in the sector as former sector leader Vestas continues to struggle.

Siemens' €2.9 billion agreement with Dong Energy covers 300 turbines that will be supplied to UK projects in 2014-17. It is the first major contract for a next-generation turbine and is most likely for Dong's Round 3 projects at Hornsea and Celtic Array.

The deal follows Vestas' decision in June to cancel plans to build an assembly plant at the port of Sheerness in south-east England, taken after postponing the prototype for the V164 7MW until 2014.

In mid-2011, Siemens and Vestas both launched their offshore turbines within weeks of each other.However, Siemens had a prototype whereas Vestas could only show models and artists' impressions.

Vestas senior vice-president for offshore, Uffe Vinther-Schou, denied that the company is pulling away from offshore wind and said it is committed to the V164-7MW turbine. "Vestas will remain active in the onshore and offshore markets, both of which continue to show considerable potential," he said.

Vinther-Schou pointed to two big offshore orders — 216MW for the Northwind offshore wind farm in Belgium, signed in June, and 267MW for E.on Climate & Renewables last October. However, both of these use the 3MW V112 turbine, which is likely to be superseded by the next generation of turbines designed for the UK's Round 3 offshore programme. It is also smaller than Siemens' equivalent 3.6MW machine.

Vestas cited market conditions as the reason for postponing the V164 and a lack of firm orders as the rationale for cancelling the Sheerness plant. Many offshore manufacturers have complained that UK government policy is causing market uncertainty.

If Vestas had built the plant at Sheerness, the closest Round 3 zone would have been the Vattenfall/ScottishPower East Anglia zone. Although both utilities have built offshore projects, ScottishPower tends to use Siemens, while Vattenfall has used Repower's 5MW turbines.

With Siemens likely to be occupied building turbines for the 8GW Hornsea zone, which it is co-developing, Repower could potentially take Vestas' place at Sheerness. Speaking to Windpower Monthly last year, Repower CEO Andreas Nauen said the company was looking for a UK production site but would make no announcement until it had secured enough orders.

Vinther-Schou said that the company was looking at a number of options for manufacturing the V164. The turbine's 80-metre blades are being designed at the company's expanded research-and-development centre on the Isle of Wight.

Prototype

Asked how Vestas would catch up with the likes of Siemens and Repower, Vinther-Schou only said the V164 would be a "game changer" in offshore technology. The first prototype will be built in 2014, but the timetable beyond that is less certain.

Vestas has received enquiries from partners about co-developing the machine., according to Vinther-Schou. However, Nordex said the same thing before it cancelled its N150/5000 offshore turbine earlier this year.

Acquisition target

Offshore technology may be important to Vestas for other reasons. There have been numerous rumours about potential bidders for the company. Investment bank Bryan Garnier predicted earlier this year that Vestas, along with Nordex, was one of the most likely targets in the wind industry for acquisition. It also highlighted the importance of offshore technology and experience in influencing a company's value.

Julien Desmaretz, a renewables analyst at Bryan Garnier, said that offshore has better growth potential than the onshore sector but warned that it requires a lot of investment. "I'm not sure that a pure player like Vestas or Nordex has a solid enough balance sheet to go offshore because one of the advantages of offshore for larger companies is the ability to procure finance for projects. This is easier for GE or Siemens but harder for the pure players."

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